External Sector Statistics

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According to Bank of Russia’s estimate, the surplus in the current account of
the balance of payments of the Russian Federation in January–April 2019 amounted
to $45.5 billion against $39.4 billion in January–April 2018. The aggregate’s
dynamics was driven to a practically equal extent by growing surplus on external
merchandise trade and declining cumulative negative contribution of other
current account components.

The balance on financial transactions of the private sector in January–April
2019, according to preliminary data, totaled $34.7 billion (against $18.5
billion in the comparable 2018 period). Virtually all increase of the aggregate
on the outcome of the corresponding period of the preceding year was stipulated
by the growing net acquisition of foreign assets by the banking sector, while
the reduction of external liabilities was more substantial than a year ago. As a
result of transactions, international reserves gained $21.7 billion, mainly,
because of foreign currency purchases on the domestic market under the fiscal
rule and receipts of proceeds from sovereign bond placements.

According to Bank of Russia’s data, the surplus in the current account of the
balance of payments of the Russian Federation in 2018 reached a record level of
$113.8 billion (against $33.2 billion in 2017). The decisive growth factor was a
1.7 times strengthening of the balance on external merchandise trade against a
backdrop of improving international prices for major Russian exports’
commodities while imports’ volume remained virtually unchanged from the
preceding year’s outcome. The cumulative negative contribution of other current
account components narrowed.

The substantial increase of the surplus in the current account of the balance
of payments resulted in the growth of net lending of the rest of the world. In
2018, balance on financial transactions of the private sector amounted to $63.3
billion against $25.1 billion a year earlier, which was caused in approximately
even proportions by net repayment of liabilities and buildup of external assets.
Contraction of foreign liabilities occurred essentially on current accounts and
deposits in Russian banks, as well as a result of declining indebtedness of
other sectors under loans. Assets’ buildup was effected, mainly, in the form of
direct investment. International reserves of the Russian Federation gained in
2018 $38.2 billion against the corresponding outcome of $22.6 billion in 2017.

The size of external debt of the Russian Federation in the course of 2018
declined by $64.1 billion, and as of December 31, 2018 it totaled $454.0
billion. External liabilities were reduced by all institutional sectors, but the
largest contribution to the country’s external debt reduction came from other
sectors whose indebtedness fell by $31.0 billion.

As a result of the considerable decline in liabilities to nonresidents whilst
the volume of accumulated foreign assets remained at the level of the beginning
of the year, positive Net International Investment Position of the Russian
Federation in the course of 2018 gained $98.3 billion reaching $370.9 billion.

According to Bank of Russia’s preliminary estimate, external debt of the
Russian Federation as of March 31, 2019 amounted to $467.8 billion, increasing
by 13.8 billion in the course of Q1 2019. The most substantial influence on the
aggregate’s dynamics was exerted by the growing external debt of General
Government as a result of nonresidents’ acquisition of sovereign bonds.

According
to macroeconomic statistics, external debt payments of non-financial
organisations, including principal and interest, will total 14.7 and
11.4 billion US dollars in 2019 Q2 and Q3 respectively.

Stripping
out intragroup payments, net payments may total up to $14.2 billion in 2019 Q2
(close to the readings of 2018 Q2) and about $9 billion in 2019 Q3 (27% less
than in 2018 Q3). The balance is made up of intragroup payments (calculated for
the top 40 Russian corporate borrowers in the external market).

Significantly
higher net payments in April, as compared to other months, are related to the
planned repayment of public debt on Eurobonds by a large non-financial
organisation that, according to our estimates, has enough FX liquidity to
perform debt obligations. In September, a significant amount of payments is
comprised mostly of intragroup financing that was regularly prolonged in
previous periods.

The Bank of
Russia’s survey suggests that in 2019 the share of intragroup borrowings in
major borrowers’ total external debt payments is as follows: 11% in April, 3%
in May, 5% in June, 0% in July and August, and 61% in September.

* The Q2
indicators have been adjusted for the updated data from contracts registered by
authorised banks in accordance with Bank of Russia Instruction No. 181-I,
dated 16 August 2017, ‘On the Procedure for Residents and Non-residents to
Submit Documents and Information Confirming Foreign Exchange Transactions to
Authorised Banks, on Single Accounting and Reporting Forms Related to Foreign
Exchange Transactions, and the Procedure and Timeframes for Their Submission’.

According
to macroeconomic statistics, external debt payments of non-financial
organisations, including principal and interest, will total $10.3 and $14.4
billion in 2019 Q1 and Q2 respectively.

Stripping
out intragroup payments, net payments may total $10.1 billion in 2019 Q1 (40%
less than in 2018 Q1) and $13.6 billion in 2019 Q2 (4.4% less than in the
second quarter of the previous year). The balance is made up of intragroup
payments (calculated for the top 40 Russian corporate borrowers in the external
market).

The
Bank of Russia’s survey suggests that in 2019 the share of intragroup
borrowings in major borrowers’ total external debt payments is as follows: 0%
in January, 0% in February, 7% in March, 20% in April, 3% in May and 5% in
June.

*
The Q1 indicators have been adjusted for the updated data from loan contracts
registered by authorised banks in accordance with Bank of Russia Instruction
No. 181-I, dated 16 August 2017, ‘On the Procedure for Residents and
Non-residents to Submit Documents and Information Confirming Foreign Exchange
Transactions to Authorised Banks, on Single Accounting and Reporting Forms
Related to Foreign Exchange Transactions, and the Procedure and Timeframes for
Their Submission’.

According
to macrostatistical data, total external debt payments of non-financial
institutions, including principal and interest, will in 2018 Q4 and 2019 Q1
total $21.8 and $10.7 billion respectively.

Macrostatistics
show that, consistent with previous years, considerable amounts of payments
fall on December ($12.8 billion), with a sizeable amount of such payments
expected to be carried over or restructured.

Stripping
out intragroup payments, net payments may total up to $20.8 billion in 2018 Q4
and $10.5 billion in 2019 Q1. The balance is made up of intragroup payments
(calculated for the top 40 Russian corporate borrowers in the external market).

The
Bank of Russia’s survey of top companies suggests that the share of intragroup
borrowings in major borrowers’ total external debt payments in 2018 is as
follows: 1% – October, 3% – November, 39% – December; in 2019: 0% –
January, 0% – February, 6% – March. Adjusted for intragroup payments, major
companies’ payments in 2018 Q4 are estimated to equal those in the comparable
period of 2017, while 2019 Q1 payments are expected to drop 42% over those in
2018 Q1.

*
The Q4 indicators have been adjusted for the updated data from contracts
registered by authorised banks in accordance with Bank of Russia Instruction
No. 181-I, dated 16 August 2017, ‘On the Procedure for Residents and
Non-residents to Submit Documents and Information Confirming Foreign Exchange
Transactions to Authorised Banks, on Single Accounting and Reporting Forms
Related to Foreign Exchange Transactions, and the Procedure and Timeframes for
Their Submission’.

According to
the macroeconomic statistics, external debt payments of non-financial organisations,
including principal and interest, will total $16.8 and $22.6 billion in 2018 Q3
and Q4 respectively.

Exclusive of
intragroup payments (calculated for the top 40 Russian corporate borrowers in
the external market), the amount of net payments due might total $12.6 billion
in 2018 Q3 (almost the same figure was seen in 2017 Q3) and $21.7 billion in Q4
(8% less than in 2017).

In September,
a significant amount of payments will be comprised mostly of intragroup
financing that was regularly prolonged in previous periods.

The
macroeconomic statistics show that a considerable amount of payments is
traditionally made in December ($13.3 billion); however, in practice, the
majority of such payments are usually carried over or restructured.

According to
a BoR survey of major companies, the share of intragroup loans in total
repayments of major borrowers is estimated at 9% for July, 43% for August, 61%
for September, 1% for October, 4% for November and 33% for December 2018.
Adjusted for intragroup funding, major corporations’ payments in 2018 Q3-Q4 are
predicted to be fairly even and average about $1.9 billion a month.

* The Q3
indicators have been adjusted for the updated data from contracts registered by
authorised banks in accordance with Bank of Russia Instruction No. 181-I,
dated 16 August 2017, ‘On the Procedure for Residents and Non-residents to
Submit Documents and Information Confirming Foreign Exchange Transactions to
Authorised Banks, on Single Accounting and Reporting Forms Related to Foreign
Exchange Transactions, and the Procedure and Timeframes for Their Submission’.

According to
macroeconomic statistics, external debt payments of non-financial organisations,
including principal and interest, will total 14.9 and 16.7 billion US
dollars in 2018 Q2 and Q3, respectively.

According to
the Bank of Russia, actual payments may reach 13.9 billion US dollars in
2018 Q2 and 12.2 billion US dollars in 2018 Q3. The rest of the amount
falls on intragroup payments (calculated for top borrowers) that tend to have a
high probability to be prolonged or refinanced. Estimated external debt
payments in 2018 Q2 will be 9% less than a year ago while in 2018 Q3 they will
be close to the last year’s level.

In 2018, the
Bank of Russia has increased the sample of companies that participate in the
survey on external debt repayment schedule to 40 firms. The survey showed that
the share of intragroup borrowings in the total external debt payments of large
borrowers in 2018 amounts to 3% in April, 1% in May, 34% in June, 8% in July,
41% in August and 64% in September. Adjusted for intragroup financing, payments
of major companies will be 9.3 billion US dollars in 2018 Q2 and
5.8 billion US dollars in 2018 Q3.

Significantly
higher net payments in April, as compared to other months, are related to
planned repayment of public debt in the form of Eurobonds by several large
non-financial organisations that, in our opinion, have enough FX liquidity to
perform their obligations. In September, a significant amount of payments is
comprised mostly of intragroup financing that was regularly prolonged in
previous periods.

* The Q2
indicators have been adjusted for the updated data from contracts registered by
authorised banks in accordance with Bank of Russia Instruction No. 181-I,
dated 16 August 2017, ‘On the Procedure for Residents and Non-residents to
Submit Documents and Information Confirming Foreign Exchange Transactions to
Authorised Banks, on Single Accounting and Reporting Forms Related to Foreign
Exchange Transactions, and the Procedure and Timeframes for Their Submission’.

According to macroeconomic statistics, external debt payments of
non-financial organisations, including principal and interest, will total $28.7
and $15.3 billion in 2018 Q1 and Q2 respectively.

According to updated information, in 2018 Q1, external debt payments mainly
consist of intragroup payments ($11.8 billion or 41% of scheduled payments,
according to macrostatistics) of Russian companies – top borrowers in the
external market. These payments are most likely to be carried over and are
highly unlikely to exert pressure on borrowers’ liquidity position.

Overall, actual payments may reach $16.8 billion in 2018 Q1 and $14.2 billion
in 2018 Q2. The balance is represented by intragroup payments calculated for the
top 30 Russian corporate borrowers in the external market.

The Bank of Russia’s survey of 30 top companies suggests that in 2018 the
proportion of intragroup borrowings in the total payments on external debts by
large borrowers is as follows: 94% in January, 12% in February, 1% in March, 5%
in April, 1% in May and 35% in June. As adjusted for intragroup funding, the
payments of top companies will total $8.1 billion in 2018 Q1, or by 18% less
year on year, and $9.2 billion in 2018 Q2, or by 50% more year on year, mainly
due to significant scheduled payments in April. In April, more than $5 billion
will be spent by several large non-financial organisations with sufficient
foreign currency liquidity to pay off their Eurobonds.

According
to statistical data, in 2017 Q4 and 2018 Q1, total external debt payments of
non-financial institutions, including principal and interest, will total $25
and $28.6 billion respectively.

According
to macroeconomic statistics, a considerable amount of payments are
traditionally made in December ($15 billion); however, in practice, the
majority of such payments are usually carried over or restructured.
Additionally, a comparable volume of payments ($16 billion) falls on
January 2018. However, the Bank of Russia estimates that this amount
predominately consists of intragroup payments of the largest Russian corporate
borrowers in the external market, totalling more than $11 billion or roughly
70% of scheduled payments, according to macroeconomic statistics. These
payments are most likely to be carried over and are highly unlikely to exert
pressure on borrowers’ liquidity position.

The
amount of net payments due (exclusive of intragroup payments) may total up to
$23.5 billion in 2017 Q4 and $15.9 billion in 2018 Q1. The balance is
represented by intragroup payments calculated for the top 30 Russian corporate
borrowers in the external market.

The
Bank of Russia’s survey of the largest companies suggests that the percentage
shares of intragroup loans in the total external debt payments by large
borrowers are as follows: 4% in October, 26% in November, 26% in December 2017;
94% in January, 28% in February and 2% in March 2018. As adjusted for
intragroup funding, payments due by the largest companies will be 13 and 18%
lower in 2017 Q4 and 2018 Q1 than in comparable periods in 2016 and 2017.

According
to statistical data, total external debt payments of non-financial
institutions, including principal and interest, will in Q3 and Q4 total $16 billion
and $25 billion respectively.

Once
intragroup payments* are deducted, which are very likely to be extended or
refinanced, net payments in the quarters under study will total $12 billion and
$23.6 billion respectively, essentially consistent with the same periods of
previous years. Macrostatistics show that a fourth quarter (mainly December) is
traditionally the time of the bulk of repayments, and experience suggests that
a substantial proportion of these will be extended.

According
to a BoR survey of major companies, the share of intragroup loans in total
repayments of major borrowers is estimated at 46% for July, 16% for August, 60%
for September, 0.2% for October, 29% for November and 26% for December 2017.
Adjusted for intragroup funding, major corporations’ payments in 2017 Q3-4 are
predicted to be fairly even and average about $1.5 billion a month, which is a
third less than in the same period last year.

The macroeconomic statistics suggest
that total external debt repayments of non-financial organisations in 2017 Q1
and 2017 Q2, including the principal and interest, stand at $20.2 billion and
$17.2 billion, respectively.

The updated data suggest that considerable
payment volume in 2017 Q1 (including $12.8 billion in March) is formed by
liabilities of top-30 Russian borrowers in the foreign market, of which roughly
$4.4 billion are intragroup payments and $3.8 billion are scheduled eurobond redemptions
by large companies holding sufficient amount of FX liquidity.

Actual debt repayments may total
up to $15.2 billion in 2017 Q1 and $13.8 billion in 2017 Q2.
The residual amount falls on intragroup payments (as determined
for top-30 Russian borrowers in the foreign market), which are usually very
likely to be prolonged and refinanced.

The Bank of Russia’s survey
among major companies showed that intragroup loans account for the following
share of total external debt repayments of large borrowers in the first half of
2017: 24% in January, 14% in February, 38% in March, 32% in April, 28% in
May, and 42% in June. Debt repayments of major companies will total $9.8
billion in 2017 Q1 and $6.1 billion in 2017 Q2, adjusted for intragroup
financing.

According to macroeconomic statistics,
in 2016 Q4 – 2017 Q1, the amount of external debt repayments by non-financial
organisations, including principal and interest, totals $23 billion and
$20.7 billion respectively.

As it is the case, the peak of
repayments occurs in December according to macroeconomic statistics
($13.4 billion), with the bigger portion of these repayments likely to be
rolled over. This December, the amount of repayments is scheduled to be down by
24% year on year.

Additionally, the schedule for
the period under consideration shows that considerable external debt repayments
are due in March 2017 ($12.8 billion). According to Bank of Russia
estimates, the main portion of these payments is made up of the liabilities of
30 Russian companies – largest borrowers in external markets. Out of this
amount, roughly $4.8 billion represent intragroup payments, and
$3.8 billion – scheduled Eurobond repayments by several large
non-financial organisations which have sufficient foreign currency liquidity to
service their debt obligations.

Overall, actual payments may
reach $21.6 billion in 2016 Q4 and $15.2 billion in 2017 Q1. The rest
of this amount represents intragroup payments (these are established for 30
Russian companies – largest borrowers in external markets), which, as a rule,
are likely to be rolled over and restructured.

According to the Bank of Russia’s
survey of top companies, the share of intragroup borrowings in the total amount
of external debt repayments by large borrowers had the following readings
across 2016: 0.2% in October, 17% in November, 29% in December; and across
2017: 24% in January, 23% in February, and 40% in March. As adjusted by
intragroup funding, the repayments by the largest companies will total
$6.3 billion in 2016 Q4 and $9.8 billion in 2017 Q1.

The
statistical reading of the total external debt repayments (principal and
interest) stands at $17.8 billion in 2016 Q3 and $22.4 billion in 2016 Q4. The
Bank of Russia estimates however the actual repayments to total up to $11
billion in 2016 Q3 and $ 21.5 billion in 2016 Q4.

The
difference owes its origin to intra-group payments (calculated for 30 Russian
top corporate borrowers in the external market), which are very likely to be
rolled over and refinanced.

The
Bank of Russia-conducted survey of major Russian companies shows that the share
of intra-group loans in the total repayments will equal to 25% in July, 3% in
August, 70% in September, 0,2% in October, 14% in November and 17% in December
2016.

Adjusted
for intra-group financing, major corporate borrowers are projected to enjoy fairly
even debt repayments in Q3–Q4, to a total of approximately $2.3 billion a
month.

* Q3
readings are adjusted for updated data based on transaction report forms issued
by the authorised banks as part of the procedure for implementing forex
transactions between residents and non-residents

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